Microfin in major crisis with near-2x NPA surge; Joint-liability lending model on shaky ground

India’s microfinance sector is facing a deepening crisis, with delinquency rates nearly doubling. The gross non-performing asset (NPA) ratio surged to 16% by the end of FY25, up from 8.8% the previous year, raising serious concerns about the stability of the joint liability-based lending model.